Written by Dee Lim
Singapore – Singaporeans and permanent residents working in Singapore have a portion of their salary deposited into a Central Provident Fund (CPF) account as part of their retirement savings scheme. While you can leave your CPF funds there to earn interest, you have the option to consider the possibility of earning a higher return on your funds.
Which CPF accounts can I use to invest?
Each member has four accounts:
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Ordinary accounts (OA) are used for everyday things like housing, insurance, and investments.
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Special Accounts (SA) are intended for use in later life and for investing in retirement-related products.
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Medisave accounts, as the name suggests, are for hospital expenses and approved medical insurance.
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Retirement account opened at age 55
If you are looking to invest your CPF funds, you can do so using OA, but you must ensure that at least S$20,000 is held in your account. Investments from SA require a minimum holding of $40,000.
There are also limits on the amount you can use for investments, known as the stock and gold limits, which are 35 percent and 10 percent of your investable savings respectively. Investable savings is the amount earned from OA minus S$20,000 plus any funds withdrawn for investments or education.
How do I open a CPF investment account?
To invest money in CPF OA, you need to open a CPF Investment Scheme (CPFIS) account with a registered bank such as DBS, OCBC or UOB. Once this is done, you will be able to invest directly with financial product providers.
You do not need to open a CPFIS account to invest your SA savings. You can also contact your financial product provider directly.
Before you are allowed to invest your CPF funds, you must first complete the CPF Investment Scheme Self-Awareness Quiz.
What can I invest my CPF funds in?
There are countless options for investing in both OA and SA.
With OA, you can explore investments in stocks, bonds, gold, mutual funds, REITs, unit trusts, Treasury bills (or T-Bills), Singapore government bonds, and term deposits.
In general, investments that can use SA have relatively low risk. This means that Treasury bills and Singapore government bonds are on the approved list, but stocks, REITs and gold are not.
Regarding investment risks, the CPF Board said on its website: “All investments are subject to risk. Risk refers to the possibility of losing part or all of your investment due to changes in financial markets.”
“Understanding the risks of different investment options can help you better decide which investments are best suited to your investment goals, risk tolerance, and personal circumstances.”
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